Don't sweat the competition
Why is there so much talk about the competition?
How to build a competitive strategy, tips for analyzing your competition, how to attain a cost leadership position against your competitors and how to out-do your competitors pervade the thinking of most business people.
The underlying strategic intent is to build barriers to competitive entry; erect a massive wall to prevent the hordes from entering your markets and taking your customers.
You have little real control over what they do. If they want to reduce their prices, introduce a new disruptive technology or enter one of your markets to compete with you, they will.
And (unless you intend to fight their actions on legal, regulatory or ant-competitive grounds), you will have no choice but to deal with the challenges their actions pose.
All you can do is try to anticipate their actions and go on the offensive, or respond to them defensively when they happen.
Rather than devote resources, time and energy to issues we have little control over, we should focus on what we have SOME degree of control over.
Rather than build barriers to competitive entry, build barriers to customer exit.
This you DO have a degree of control over; you stand a better chance of creating the outcome you want than basing your actions on what your competition does.
Spend your time making it extremely difficult for your customers to leave given a choice they are offered by a competitor.
What do barriers to customer exit look like?
1. The emphasis is on creating personalized experiences for customers as opposed to flogging products and services at them with a one size fits all mentality.
How customers feel is given priority over what they need.
2. Every member of the leadership team "makes the call" to customers on a daily basis to ensure they are being served with relevant and compelling solutions.
3. Special offers and price promotions are restricted and proactively offered to loyal customers; they are not used as a tool to attract new customers.
4. Customer retention outranks new customer acquisition in terms of priority; the key success factor on the organization's balanced scorecard is the rate of customer attrition.
5. The policy system of the organization is built to serve customers not control them. "Dumb rules" are eliminated in favour of those that facilitate customer engagement.
"Going to war" with the competition may get your adrenalin flowing, but it does so at the expense of the loyalists who committed to you in the past and who need you to continue to give them good reasons to stay.